Indonesia Could be Affected by US Tax Amnesty Program

TEMPO.CO, Jakarta – Investment Coordinating Board (BKPM) head Thomas Lembong viewed that the United States plan to roll out a tax amnesty program is likely to be realized due to a huge amount of funds parked by US-based companies outside the country.

“There was a prediction related to the matter, and it is very likely,” Lembong said at the DBS Conference held in Jakarta on Thursday, November 17, 2016.

Currently, as much as US$2.5 trillion owned by US-based companies are deposited in Europe. Upon the implementation of the tax amnesty program, there would be massive fund repatriation from Europe to the US.

“Certainly it will have impacts on Indonesia, and we must anticipate it,” Lembong added.

According to Lembong, Indonesia must be wary of a number of president-elect Donald Trump’s policies in the future.

“Based on my estimation, within a year ahead, the global economy could experience a speed bump,” Lembong said.

However, Lembong viewed that such a condition would be an opportunity for Indonesia, depending on policies to be made by the Indonesian government.

Economist A. Prasetyantoko echoed Lembong’s prediction, saying that the US would likely to roll out a tax amnesty program, just like Indonesia.

“There will be a huge amount of funds repatriated to the US,” he said.

Earlier, Finance Minister Sri Mulyani Indrawati said that Indonesia must continue to watch President Trump’s policies, since the US remains the biggest economy in the world. Sri Mulyani suggested that Indonesia’s economic strategies must be capable of strengthening domestic demands.